we will see you back here next friday at 5:30 p.m. eastern time only on cnbc. i'm jim cramer, and welcome to my world. >> you need to get in the game! >> firms are going to go out of business and he's nuts! they're nuts! they know nothing! >> i always like to say there's a bull market somewhere. and i promise -- >> "mad money." you can't afford to miss it. >> hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to make you a little money. my job is not just to entertain but toejt you. call me 1-800-743-cnbc. we see different flavors of fear in this stock market every day. often it's the fear of getting hit by an earnings disappointme disappointment. or the fear of being whacked. oh, yeah!

by a terrible italian bond auction or spanish financial bankruptcy. but today with the dow soaring 204 points, the s&p rocketing 1.65%, nasdaq falling 1.48%, we saw a different kind of fear on display entirely. it was the fear of actually missing a rally. or worse, betting against one. now, what spurred that new and strange fear? what created such a frenzy of buying after six straight days of decline, hideous decline? you know what did it? that source of all good capitalism. china did it. china. the possibility that the chinese government will take action on sunday night to stem the deceleration in their economy. you see, last night china reported its economy group lost a better than expected 7.6%. from our point of view that's not recessionary. but it is well below what the prc communist government wants. so our game plan starts with the

expectation that we get a big chinese rate cut before monday's opening. which is why i took the unprecedented opportunity to put sunday right on the upper left-hand corner. and this is perhaps -- may be. we're looking for a multihundred-dollar stimulus plan, a whisper. which is why i put it right up here and not somewhere else. the fear of such a cut is what caused professionals to buy stocks ahead of that possibility. it was just the fear. nothing else happened. that's right. after some deadly losses at the hands of some weak earnings reports and endless dithering in europe, many money managers had simply grown weary coming into today of owning stocks. or they had become accustomed to minting money by just selling them, shorting them, and then covering and buying them. but when we got that weak chinese number out last night, man, they were breaking out the

red book. they were trying to figure out about how big the big easy is going to be. and so they covered their shorts. and frantically bought the very same stocks that they'd been dumping for days. >> buy buy buy! >> then you saw what happened. that's how you get a rally. money managers haven't checked their worries about earnings or european calamities. they just for the moment are more afraid of missing the up side that could come from china hitting the gas pedal. how do i know this? am i making it up? because when i speak to them, and that's part of my job, i speak to people, i can tell you that so many of these managers were hoping to get bad earnings news today from two huge banks that reported, wells fargo and jpmorgan, which would then allow them to buy stocks cheaply ahead of the prospective rate cuts. went home, said listen, i'm worried that china's going to cut rates, but that's okay because jpmorgan will blow it or wells will blow it and we won't be able to buy things. but you know what? those banks dashed the hopes of these bears by reporting spectacular numbers, and the market never looked back.

portfolio managers, they spent the rest of the day, mostly futilely, to try to keep up with the averages. so what else do we have to look forward to besides faith with the chinese communists? they'll play their part as capitalist rotors. first off, people will be buzzing about citigroup's numbers on monday. which comes after sunday. citi's a quandary. as long as the emerging markets are red hot, you know, like sizzling, smoking, you have to like citi's book of business more than of that domestic banks. only about a third of business comes from the united states. not anymore. now we like the domestic security. our housing market's on the mend. witness the strength of domestic biggie jpmorgan and mortgage king wells fargo. we can't like citigroup nearly as much as the domestic banks anymore. that's why i don't think it will ignite a further bank rally when it reports. sorry. tuesday we're going to hear from a company that to me has the most value to be unlocked of any major corporation on earth. and that's johnson & johnson.

long the company i recommended when i was at goldman sachs in the '80s. we're going to be listening to the new ceo. his name's alex gorseky. and while i don't want to put too much pressure on you, alex, i know i'm doing this to you, but if gorsky even uses a word like unlock or three words like "bring out value," you won't be able to buy this stock anywhere below 70 bucks let alone for its high today. this stock has had not a stitch of good news in months. all it seems to do is just kind of levitate. wait till gorsky says unlock. it's like unlocking his car door. this thing's going higher. lots of folks are concerned about the role of currency and earnings. namely the companies which export a lot of product on weaker currencies. they won't be able to show the gains we've been expecting. when these weak currencies are repatriated in stronger dollars. you hear all the time the dollar's too strong. does it really matter? isn't it just paper transferring? we'll find out. we'll find out when coca-cola reports on tuesday.

the sudden strength of the dollars will likely knock some pennies off k.o.'s performance. if the stock gets hit off that we know we're going to have a rough ride for the rest of earnings period when many of the global players report. we'll have a very similar currency situation to coca-cola. coca-cola also has big commodity cost pressure. historically they've hedged it. but given how petrified buyers and sellers are about the increase in the price of corn because of the drought that's scorching, we're going to get an update on how badly the profits of our food and beverage companies could be dinged by the sudden shortage of corn. tuesday's a big litmus day. what else? we're also worried about the sudden drop-off in demand we've been hearing about for information technology, percentage computers, and big technology servers. now, intel reports after the close. and i think -- frankly, i think it's going to be a tough quarter. but i wonder if the stock even gets hit given its recent decline, its terrific 3.5% yield, and the longer-term prospects for the new product lines. if intel doesn't drop, if it

reports a less than stellar quarter, guess what? that's the clarion call to buy -- >> buy buy buy! >> -- not sell. all of tech. in other words, a not so hot report by intel coupled with a stock that doesn't go down on wednesday. that means you're going to have to circle back and buy a lot of tech that's been given up for dead. wednesday's going to be a big dueling bank day. when we get reports from bank of america, the bank that's struggling to do things right. and u.s. bancorp, the bank that can do no wrong. i bet both will live up to these epithets. we'll also hear from honeywell, which i think can clear up a bunch of concerns about one of its core businesses, aerospace. airbus are having trouble delivering and they're downbeat. until today the market was in negative mode so people just glommed onto airbus's gloom and doom and sold everything aerospace. honeywell can set is straight and explain how we're not at the peak of the aerospace order cycle although i read that

phrase, peak of the aerospace order cycle, i read that five times in the last 72 hours. it's conventional wisdom. talk about myth busting. as i already mentioned we're expecting some terrific news out of china sunday night. remember, it's right there. lots of people think that if we get it we will see a rush of buying into everything from capital goods companies like caterpillar to luxury goods makers like coach. but you know what stock portfolio managers are really using to track chinese fortunes? yum brands. that's right. because of its monster chinese kfc footprint. you can speculate all you want on yum. but on wednesday we find out how kfc's really doing. and i think that a slowing china coupled with a big prospective increase in the price of chicken thanks to higher grain prices makes yum a good sale going into the report. i'm saying we get a little rate cut action you sell yum before the quarter. thursday's going to be -- well, i'll put my sleep at night

recipe for good investing to the test. verizon reports. i think growth is terrific in this domestic phone company. i probably follow this one more than any other stock other than apple. and while it's gotten more expensive of late, i'll bet we'll be pleasantly surprised on the quarter. if coke gets hammered because of currency on tuesday look out for google when it reports after thursday's close. google's got a huge european business. and we know from the company's free speech principles it ain't making up the losses in china. stock is cheap but we need more than that to pull the trigger. finally on friday we'll hear from general electric and i'll tell you what i want to hear. i want to hear g.e.'s financial services group is divvying a huge amount to the parent. what i don't want to hear is their energy, notably wind, have v. begun to hurt earnings. you want to rally to did not? we need good news out of china sunday night about rate cuts and a possible stimulus package. we get that then we'll be able to excuse a lot of old in-line quarters and even a few earnings down. even a couple of earnings guide down from the rest of the industrials.

but if the chinese don't deliver, if they miss, if they can't grab the red book, let me tell you, it won't really matter what these other companies say because everything's going down. why don't we go to jamie? jamie in south carolina. jamie! >> caller: hey, cramer, i'd like to give you a big palmetto state, charleston, south carolina let's get this weekend started boo-yah. >> let me give you a crushed a big palmetto bug in the bedroom the other day. >> caller: nice. nice. hey, i'm a long-time procter & gamble shareholder. i'm wondering if this increase is appropriate based on this news of bill ackman getting a big stake in the company. and just in general how much influence does a large shareholder have on a couple of the board members, if you know what i mean. >> look, i'm not saying ackman doesn't matter. i'm saying when we put mcdonald on the wall of shame what we said is is there anything that makes it so the board wakes up and realizes he's not the right guy. and there are some nice people on that board, i'll tell you. smart people. that means that that stock goes

higher. what you're seeing is the recognition that ackman -- we're all seeing the same thing, which is the board's waking up and knowing mr. mcdonald just wasn't the right guy. hey, mistakes happen. ask jamie. john in virginia, please. john. >> caller: jim. are you buying yahoo right now ahead of earnings given that they just had a scandal with the hackers getting passwords and they still haven't is pinned down their ceo yet? >> ya ah and cnbc have a deal. okay? of which i'm part of. i think ross levinson who i've known as -- remember i'm a dotcomer from like the '90s. i street started the street.com. i think levinson's the real guy. and az said on the street.com and i'll repeat here if p this stock breaks out to the up side it's because they make him ceo. he's young. he thinks young but he's not that young. he's got tremendous ideas. and he'll surprise us to the up side most certainly. john in california. john. >> caller: hey, john. i'm a pft customer and i'm outraged how my money was stolen and thousands like me to mf

global. do you think regulators should be held accountable and customers made whole? jim, do you have our back? >> well, the u.s. attorneys have to have your back by putting people in jail. long jail sentences will concentrate their minds. i really don't know what the regulators were doing in this one. how could they miss it after mf global? you were really caught -- how do you get things going here is you have some show trials. and i am -- if you want me to have your back, i need a prosecutor to have my front because that's what's going to do it. today was a good day. if you want it to continue you've got to hope for sun- -- for m no. - -- you've got to hope the chinese take action. stick with cramer. >> coming up, golden years. cramer's searching the states for a domestic play that could help you beat the global heat. and tonight he's got a spec that provides service and a smile. could it keep your portfolio healthy? and later, on target?

as international tensions rise, the need to secure our country is bigger than ever. and aerovironment is piloting the aircraft that protect us. but its stock has been grounded, down 20% this year. cramer's finding out if it could be ready to climb again when he talks to the company's ceo. all coming up on "mad money." you know what i love about this country?

trick question. i love everything about this country! including prilosec otc. you know one pill each morning treats your frequent heartburn so you can enjoy all this great land of ours has to offer like demolition derbies. and drive thru weddings. so if you're one of those people who gets heartburn and then treats day after day, block the acid with prilosec otc and don't get heartburn in the first place. [ male announcer ] one pill each morning. 24 hours. zero heartburn.

okey-dokey. we finally had a good day! ♪ hallelujah no, a great one even. the first rally in more than a week. but i am urging you right now to not get too carried away. oh, man, every day it feels so bipolar. the seesaw between either panic or the euphoria thing. very little middle ground. that's no way to manage money.

better take a page from my good pal buddy friend larry david in "curb your enthusiasm." keep a cool head while sticking to the playbook that's helped us successfully navigate even these volatile waters. okay, you know the drill. i don't care. we're going to go over it again. we need to invest in, not trade but invest in domestic security stocks. no international exposure. ideally with consistent defensive businesses and big dividend yields. but look, i know this isn't the most exciting way to invest. and that's a problem for many of you. you don't want to admit it, but it is. more than just about anybody else in this business, i believe that enthusiasm is still a necessary component of good investing. you take away any sort of thrill, and then you lose your motivation to do all the homework that's needed to manage your portfolio. and look, you do -- i mean, the ideal person spends an hour per week per position. i know that's too ideal. but once you lose interest in the game, you stop checking up on your stocks as often as you should.

and sooner or later you'll be taking losses left and right because you're not doing the homework. losses that could have been avoid avoided if you'd simply kept your eye on the ball. i've got a problem here. i need to keep you engaged. which isn't exactly easy given that for most people there are a zillion things they can do to amuse themselves that are more enthralling than researching stocks. that's why i break out a little time each week here on friday on "mad money" to devote to speculation. to identify high risk high wrafrd gains with the potential to deliver the kind of outsize gains that can make anyone salivate. let me introduce you now that i have your attention to a small cap spec that i think fits perfectly in this environment. it's got a bland name. it's called health care services group. hcsg for all you home gamers. this company doesn't do anything particularly sexy. it provides outsourced housekeeping, laundry, linen, and food services to about 3,000 long-term health care facilities

including nursing homes, retirement complexes, rehab centers and hospitals. but health care services is still my favorite kind of speculation. it's an orphan meaning it's an under the radar name that doesn't have a lot of sponsorship on wall street. only four analysts cover this stock, and they're all from those smaumer boutique firms, not the big what we call bulge brokerage houses, the big ones you see people on tv with. in other words, healthcare services is the kind of undiscovered little orphan annie name that should be able to give you some juicy gains as the company grows and the stock gains adherents from the bigger firms. i got this one from a guy who's had a great record with us. brian ash tenberg, runs the great breakout stocks blog on the street.com where i blog. now, even more importantly, healthcare services group is a defensive stock. it does 99% of its business in the good old usa. domestic security. it's a health care play. so if our economy slips into a

recession this should still do just fine because health care is about the last thing people cut back on after food and water. best of all, it's got a juicy 3% yield. not only that but this company has raised its dividend, get this, every single quarter for the last nine years. that's 36 consecutive quarters of dividend boosts. i don't know about you, but for me that's about as sexy as it gets. beyond that, though, health care services is a growth business. all around the country health care facilities are trying to cut costs by outsourcing various functions like housekeeping, food. right now 29% of hospitals outsource house sxooepgs laundry, 28% outsource their food services. not so -- you look at the long-term care sfilths and those are the company's main customers. only 15% of them outsource their housekeeping and laundry services. less than 5% outsource food services. he this make it all themselves. that tells me the long-term care market is still massively underpenetrated versus regular hospitals. bow oh, boy, and that means

healthcare services group has a lot of room to grow. we don't want any earnings sprayses and we don't have to worry about any with healthcare services as it just reported on tuesday after the close. and while their earnings were in line their revenues rose more than 26% and all that growth was organic. that makes the company among the fastest growers in its space. healthcare services' core laundry and linen business, 74 pefrts company's sales, expanded at a good 16% clip. but the real product is the food services business, still in the early stages of being rolled out. the food biz represents 26% of the company's sales but it grew by more than 50%, 5-0, in the latest quarter. this part of the business is on fire. it's showing no sign of stopping anytime soon. what snelt healthcare services group has about a 95% client retention rate. that means 95% of the clients keep them. diversified client base, healthy balance sheet, $1.13 of cash per share. what's more, unlike other health care names where you have to sweat, worry, be afraid about

what the federal government might do with medicare, medicaid reimbursement rates, this company has zero exposure to medicare and medicaid. how is that possible? because healthcare services is an outsourcer. it's not a healthcare provider that's reimbursed by the feds. when they sign a contract with a nursing home or any long-term care facility their contract'll increases are based on the wage increases its clients grant town skilled workers not to medicare reimbursement. it's the kind of thing that makes health care providers nervous which means they're more likely to cut costs by outsourcing various functions to, yes, healthcare services group. we've got a relatively unknown stock with a high quaumt growth story, consistent business, juicy yield, great track record. what's not to like here? the knock on healthcare services, it's expensive. has a high multiple. sells for more than 26.6 times earnings with an 18% long-term growth rate. that is more expensive than most of the stocks i like to talk about on the show. the stock has always had a high

multiple. right now its growth prospects than it's ever been in years. so of course it can be expensive. in short i think it's worth the price, especially when you consider 3% yield. that said, you can afford to be patient. at the moment healthcare services is less than a point off its 52-week high. i say wait for the stock to get knocked down by the next marketwide sell-off we're probably due for in a couple days. enthen start building your position. if you want a stock that's speculative and secure a rare combination look no further than healthcare services group. this is the ideal spec for this current environment. and i think it is a -- >> buy buy buy! >> -- into any weakness at all. i want to start the questions with matt in new york. matt! >> caller: boo-yah, jim. this is matt from adirondack, new york. how are you? >> man, i'm dol doing real well. how about you? >> caller: i'm doing well. i'm calling on behalf of spectrum pharmaceuticals. sppi. >> spectrum, yes. >> caller: they've grown 139% in the past year and i'm kind of wondering should i wait or

should i buy for this opportunity? >> this is a good stock. this is a good stock. and i don't know if you're going to get a chance -- here's what you do. this is a very good oncology spec. what i'd like you to do is i say buy and then wait for weakness. it's not going to be because of the company. it's going to be because overall there will be a big decline decline in health care. that will be your choice. but it is a really good stock. let's go to aaron in missouri, please. >> caller: do you think me wiser to invest that fitness, like lifetime fitness -- >> you know, i've always been a fan of lifetime fitness. it's not doing that well lately. what makes me a fan of it? frankly because the facilities are so great and my family uses them. however, here's what we've got to do. we have to do a compare. let's do a compare and then we'll be able to do it head to head. you know how we do those thiengz. we do them all the time. we do a hamburger war, a soda war, a beer war. we're going to do a fitness war. it will be like a thumb war kind of thing. and then we'll get to the bottom of it. all right. this market's screaming for

domestic security, but that doesn't mean it has to be boring. hcsg is looking spic and span. 3%. all right. so it's a little expensive. don't worry, the market will knock it down. then you can grab some. after the break i'll try to make you more money. >> coming up, on target? as international memories rise, the need to secure our country is greater than ever. and aerovironment is power the unarmed aircraft that helped protect us. but its stock has been grounded. down over 20% this year. cramer's finding out if it could be ready to climb again when he talks to the company's ceo. this man is about to be the millionth customer.

would you mind if i go ahead of you? instead we had someone go ahead of him and win fifty thousand dollars. congratulations you are our one millionth customer. people don't like to miss out on money that should have been theirs.

that's why at ally we have the raise your rate 2-year cd. you can get a one-time rate increase if our two-year rate goes up. if your bank makes you miss out, you need an ally. ally bank. no nonsense. just people sense. use the points we earn with our citi thankyou card for a relaxing vacation. ♪ sometimes, we go for a ride in the park. maybe do a little sightseeing. or, get some fresh air. but this summer, we used our thank youpoints to just hang out with a few friends in london. [ male announcer ] the citi thankyou visa card. redeem the points you've earned to travel with no restrictions. rewarding you, every step of the way.

how do you know when a beaten-down stock has been punished enough? take aerovironment. avav. the $550 million company that's the number one supplier of small unmanned aircraft. aka drones. to the u.s. military. we know the use of these drones has expanded dramatically over the last decade. they're the one part of the defense budget that obama can't get enough of. and when it comes to the drones that are used for surveillance and reconnaissance, avav is the unchallenged leader. they have 75% market share in the military market. however, with the war in iraq over and the war in afghanistan winding down at the same time

the u.s. government is in real danger of falling off this fiscal cliff we keep hearing about and the domestic budget is in danger of being slashed you can understand why people have been worried about aerovironment's prospects, which is@stock is down 20% for the year. plus the company is an electrical vehicles kicker. they make charging station systems. the electric market really hasn't taken off the way many of its boosters had hoped. because of these fears the analysts who cover the environment have tamped out expectations. earnings by 6% over the next 12 months. the company reported back on june 26th they knocked it out of the park, delivering 9 cent earnings on a 71-cent basis beat. and even better. management gave pretty darn good guidance for 2013 fiscal year, which is what we're already in. and management has 63% visibility for 2013, meaning they can already see where 63% of their revenues are going to come from. not bad at all. so have we now reached the point where this stock is reflecting all the worries but not enough of the positive? let's talk to tim conver. he's chairman and ceo of

aerovironment. to find out more about his company's prospects and how they're doing right now. mr. conver, welcome back to "mad money." >> thank you. good to be back. >> all right, sir. we are -- we do a lot of coverage these days on cnbc about washington. not that i necessarily want that to happen because i like -- i talk about business. but your business, your budgets, what you tell your compensation committee for your employees, all do seem to hinge a great deal on what looks to be an automatic process that could end up cutting your budget when the defense department -- when they put together the pentagon's budget for next year. how are you able to deal with what the projection should be, given our current crazy system? >> well, you're right. it's a lot of uncertainty. i don't think anyone knows what the defense budget's going to be next year. our primary defense products, however-r these small unmanned aircraft systems. they are -- the demand comes from boots on the ground because those are the people that use

them across the service. they dramatically improve their effectiveness. and they save lives. that's driven all the services in the department of defense to adopt these systems for long-term programs. it's how they train, plan, equip the force with how they fight. much like nightvision goggles a couple of decades ago. they're also extraordinarily less expensive than any other alternative. in a period of uncertainty and tight budgets, i think high demand and low cost will be a benefit. >> at the same time, though, there are branches of the military that like to have big projects. i mean, that's what we always read about, right? we always hear about these giant k projects bring a lot of jobs home. i mean, is it any possibility you'll be sack fooisd on the altar of let's use what eisenhower called it, the military-industrial complex? >> if you look at the latest

data from the defense department, 85% of all the unmanned airplanes in the inventory are small unmanned systems. and if you look at the budget, about less than 3% of the uav budget goes to acquiring those. they're in high demand. they save lives. they're relatively inexpensive. they're easy to support politically for that reason. and they're hard to deny for that reason. so it's still a pretty good position i think to be in given the headwinds in the government budget arena. >> all right, mr. conver, you seem to have what the army wants. a good piece last week in the "l.a. times." looking here. a piece in pakistan today. it's a missile called the switchblade, which is apparently the one that would eliminate a lot of the collateral damage. can you describe to our viewers what that does? >> sure. switchblade is a new innovation that our engineers came up with

after spending time with operators that had come back from iraq and afghanistan and were describing situations where they would often be pinned down by snipers, by mortar fire, and were unable to respond directly. often if their radio works, they're able then to call in airplanes within half an hour, maybe an hour and a half if they're lucky. an f-16 or an apache can show up and find the problem and solve it. often with very large munitions. so our guys decided they could help these soldiers, sailors, marines, and airmen that were in these situations. this is a backpackable airplane. it's like a uav in its capability in that it can be launched off the ground, its same control system they use for our other uas or unmanned airplane systems. it allows memorandum to go find

the target, verify it visually, and then designate the target. and at that point the airplane becomes a direct munition. it solves the problem. it's very precise and allows them to see everything that's going on all the way in and therefore eliminate almost all of the mistakes that could happen, causing people to be harmed that were not intended to be. >> that sounds almost too good to be true. but what happens if the bad guys get one? >> well, the defense department has for many decades developed a lot of procedures to keep their important weapons systems under control, and we're counting on them to continue to do that in the future. >> you do have this other business, this electronic charging business. we hit 100 million miles that have been driven by electric cars, but i also know the government itself wants to get

in this business and they're giving away charging systems. is this becoming a possibility that you're in a business that the government doesn't even want to be a business? >> well, we are spending a lot of our time and energy in meeting the needs of virtually all the customers and segments in that market right now. that ranges from automobile manufacturers to consumers to utilities to local governments and to private operations that are standing up public charging infrastructure. i think we have the broadest solution of hardware and installation and software and network software and the most comprehensive warranty solution for each of those verticals. and i think as a result we have probably the largest installed base of both 240-volt chargers and the fast chargers in the country. in many of those cases those

customers could have chosen free charging solutions that are subsidized by government programs. but i think the package that we're providing is compelling now, and i do not believe that the free giveaway programs will last forever. so in the long term i like our cards in this market as well. >> you guys definitely do build a better mousetrap, whatever position you're in. i want to thank timothy conver, chairman and ceo of aerovironment. thank you so much for coming on the show, sir. >> thank you, jim. >> i'm less worried about the fiscal cliff. also don't like it when the government gives away product against. but if a better mousetrap is out in the marketplace, that will win. that is avav, mr. conver. stay with cramer. >> coming up, the clock is ticking. call cramer at 1-800-743-cnbc. to find out how to fire away at cramer on the "lightning round." can he withstand your thunderous

onslaught of stocks? and later, send cramer an e-mail to madmoney@cnbc.com or tweet him @jimcramer #madtweets. and he might just answer you on the air on an all new edition of "mad mail." all coming up on "mad money." this is new york state. we built the first railway, the first trade route to the west, the greatest empires. then, some said, we lost our edge. well today, there's a new new york state. one that's working to attract businesses and create jobs. a place where innovation meets determination... and businesses lead the world. the new new york works for business. find out how it can work for yours at thenewny.com.

what happens when classroom teachers get the training... ...and support they need? schools flourish and students blossom. that's why programs like... ...the mickelson exxonmobil teachers academy... ...and astronaut sally ride's science academy are helping our educators improve student success in math and science. let's shoot for the stars. let's invest in our teachers and inspire our students. let's solve this.

it is time. it is time for the "lightning round." rap rapid-fire questions. play until we hear this sound and then the "lightning round" is over. are you ready, skee-daddy? it's time for the "lightning round" on cramer's "mad money." adam in tennessee. >> caller: nice big shoutout from tennessee. boo-yah. what's going on? >> i'm a volunteer myself. what's going on in. >> caller: i'm looking at anr, alpha natural resources. power demand flat. the stock's been falling for a few years now. do you think there's any up side potential here? >> you know what, i can't see selling this stock down at 7. i've hated this stock for maybe 65%, 70%. i'm not going to hit buy buy buy

but i can understand owning it for splabs. let's go to ira in new york. ira. >> caller: yes, jim. apple. aapl. i want to know whether or not you think they'll beat their earnings report on july 24th and what do you think about their iphone and i pad sales? >> i don't know if we'll beat this. you'd better hope this stock comes in because i've got to tell you the line-up of what you have after this quarter with the new ipad, with the new iphone, with the new itv it will be a blessing for all of us. my charitable trust owns shares in it. if this stock were to come down. i think apple's going to be a fantastic stock for 2013. that's where i'm starting to think about investing now that it's july. i want to go to tyrone please in virginia. tyrone. >> caller: boo-yah. how are you doing, jim? >> real good. how are you, tyrone? >> caller: good. i'm calling about offshore technologies. >> i've liked orasure. they got that approval.

i've lakd it forever. i am a believer in diagnostics. whether it be from beckman dickinson or gors. spau. i want to own the stock even after that approval. let's go to danand from new york. >> caller: hey, jim. ba-ba-ba-boo-yah! >> nice. nice stuering boo-yah. >> caller: i want to know about lexmark. >> even after this quarter it's not too late to sell it. it is just a terrible -- it's a terrible company. and that, ladies and gentlemen, is the conclusion of the "lightning round"! ♪ if i knew you were coming i'd have baked a cake ♪ we've got to talk emotions. i might as well have attacked your mothers along with a half dozen apple pies and a few american flags thrown in for good measure.

you've got to check your emotions at the door. this is what i call a teachable moment! >> got your attention? >> apple pie! check your emotions at the door. >> bullseye. >> and now this week's installment of "jim cramer explains twitter." >> @bills say -- perfect. ♪ hallelujah >> hashtag. >> thanks for tuning in to this week's edition of "jim cramer explains twitter." all right. listen to me. you've got to worry about what's -- >> perhaps the most fashion-forward retailer that i know. or at least that i like to go to. >> hey, by the way, david faber this morning on "squawk on the street" thought this was pretty cool-looking. >> i'm wearing my burberry tie. >> oh, cool.

♪ you're the inspiration ♪ splish splash i was >> my kick bag. the contents of which swing into action the moment i get out of the shower. i like to brush my teeth for a second time of the day. what do i use? no, not a bottle of jack! how did that get here? it gets in all those hard to reach places. like kesha. other than the fact she uses the dollar sign instead of an s when she spells her name. i like to cool my ears and dry them. because of that nasty thing i stick in my ear for "squawk on the street," the ifb they call it. a real wax gatherer. i use this old-fashioned mach 3. it doesn't do anything at all except shave me well. no matt no wonder -- the privileged investing tools of wall street and make them simple, intuitive, and available to all. distill all that data.

make information instinctual, visual. introducing trade architect, td ameritrade's empowering web-based trading platform. take control of your portfolio today. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account. 

♪ ♪ ♪ ♪ [ male announcer ] what's the point of an epa estimated 42 miles per gallon if the miles aren't interesting? the lexus ct hybrid. this is the pursuit of perfection.

time to catch up on some homework. first up, on tuesday linda in connecticut asked me about log in pharmaceuticals. lgnd. i said i'd get back to her. this is a drug developer that suffered through years of weakness with the stock dropping from $68 ten years ago before

bottoming at $10 last fall. the tide could be turning. in january last year they acquired cidex which gave them a drug formulation that's a key ingredient in onyx pharma's new multiple myeloma treatment, one that recently got a thumbs up from an fda advisory panel, turning onyx into one of the all-stars of the second quarter. ligand should see an increase in royalties from glaxosmithkline's promacta which recently received approval for hep c. the stock has had a huge run since beginning of june rising to nearly 18 and i think it would be dangerous to try to chase it up here. at this point we have to say we missed it and move on. if you own ligand you need to ring the register on this position. nobody ever got hurt taking a profit. and also celgene, that rumored -- celgene is a buy here still even though onyx's drug knocked it down. next we got a call from peter in california. aray. he wondered if it could be the

next intuitive surgical. i wanted to do more homework before opining on this highly speculative medical device name that trades in the single digits. accuray acquired tomotherapy a year ago. they offer their cyber knife systems that deliver image guided therapy for the treatment of cancer and other diseases ranging from high precision radio surgery to precision guided radiation therapy. accuray announced the acquisition is go well while managers forecast a return to profitability in less than 12 months. but ac kruchltray is not the next -- everyone's always the next intuitive surgical. i'm concerned about government reimbursement rates from competition from barian medical which is a much large year player in the same space that's starting to gain traction internationally. this stock is up 56% for the year. so for heaven's sake ring the ren register. okay? i'm against greed. everyone's all excited again. believe me, you won't be excited three days from now.

let's go. here's one from barbara. just mad mail with some mad tweets. let's get started first with "jim, my query is regarding diageo. i have owned it for three years and i want to know if i should now sell it. at the current price the dividend is a little over 2%. what should i replace it with?" barbara, no. diageo's terrific. and the fact is that the yield's so small now because it's had such a big run. just own diageo. it's really one of the great -- i like beam. i like diageo. these are great, great -- brown-form brown-forman. these are the three i've liked for a long time. and just because it's high doesn't mean you've got to go. i think it's a great situation, diageo and is a multiyear own. i'll let you know if i change my mind. here's another e-mail from you a home gamer who writes, "boo-yah, jim. you are killing me. all this talk about dividend payers and not one word about waste management, wm. the garbage has to go somewhere and they're paying dividends we all want. what is the problem? say something good or bad. dave in new jersey."

>> dave in new jersey, i have another show, "squawk on the street" at 9:00, and there i cover the fact that i thought that morning stanley was wrong to take waste management from a hold to a sell. i specifically said mr. steiner the ceo's doing a great job paying you 4% to wait for a turn. do not sell the stock. the stock is now above or around where it was upgraded for a sell. here's a tweet. from hartzog phillips 37 one to hold one long-term. lng. wrt. clne. clean energy. any thoughts? lng just got the financing, first gigantic plad plant, the big ship, the natural gas overseas plant. and i feel really terrific about lng. i have to say if you have to own one of the three then it's going to be chen yooer. that's it. more after the break.

forty-five states have joined together... ...to ensure consistent academic standards across america. these internationally recognized benchmarks... ...are unlocking a better way to prepare our children for college and their careers. because when our kids do better... ...america does better. let's reach higher. let's invest in our teachers and inspire our students. let's solve this.

those of you who expect me to come out here tonight and blast the heck out of jpmorgan and ceo jamie dimon, you'll be sorely disappointed. true, disxhon his firm committed a grievous error, terrible multibillion-dollar mistake, and a winner became a loser. but neither the bank nor dimon himself have to stay losers. let's talk about the transformation with today's quarterly results well under way. first of all, i never thought a bank as high quality as jpmorgan could ever screw up as badly as it did. i didn't. and when confronted with the facts about the screw-up i never thought someone able as jamie dimon would dismiss the situation as a tem pefrt in a teapot, his own regrettable

words. those events, the way dimon treated the naysayers will forever blot my thinking about the bank and its ceo. however, there is a playbook for redemption for jpmorgan and the ceo. put better controls, in dismiss those who screwed up and try to call back their bonuses. as of today dimon has checked off every one of these bonuses. second we have to see whether the company will be good to its word that business was strong and getting stronger which was the subtext of the chatter at the time of the admission. turns out it was even better than that with june being an exceptionally profitable month and a really terrific streak of business. third we need to hear some explanation for why someone as good as jamie dimon didn't catch this rogue trade before it blew up and cost the firm billions. or why just to minimize it when it was flagged. my biggest fears were twofold. one, did dimon not understand the awful trade? in other words, was he in over his head? or two, did dimon take his eye off the the ball? today with the restatement of the first quarter on top of the earnings for the second quarter dimon left the impression that perhaps the numbers he was looking at from the lontd office

that generatesed the loss may not have been submitted in good faith. in other words, he didn't take his eye off the ball at all. and he definitely understood what was shown to him but what was shown may not have been all that honest. i actually find comfort in that explanation. you see, if a ceo is in over his heads not working hard enough, that ceo has to go, period. but if that ceo is simply ing input from a trusted lieutenant that isn't true, if the underling was dissembling to dimon, then that's actually very hard to catch and is only often spotted by the best in retrospect. and i think what we learned is that might have happened here. and the dimon statements about the 10% trade being a tempest in a teapot, based on false data that no one, not even dimon o'could hope to spot. is the money good? given the facts and cleanup and results the only judgment that matters now is if the stock is a buy or a sell. the stock's clearly gotten too cheap versus the fundamentals. the answer's pretty darn clear. jpmorgan, it's a buy. stick with cramer.

this is new york state. we built the first railway, the first trade route to the west, the greatest empires. then, some said, we lost our edge. well today, there's a new new york state. one that's working to attract businesses and create jobs. a place where innovation meets determination... and businesses lead the world. the new new york works for business. find out how it can work for yours at thenewny.com. seconds away on a special edition of "the kudlow report," the markets make a big play for a sign of life in the economy. 204 points up. but does this rally really have legs? also,